Government Social

California has fourth-highest tax rate; Arizona, Nevada among lowest

California has the nation’s fourth-highest state and local tax burden as a percentage of personal incomes in 2010, and that was before voters favored Proposition 30 that increases sales and income taxes last fall, according to the latest national survey by the Tax Foundation.

Californians’ tax burden was 11.2% in 2010, the latest information available from the nonprofit group. The Golden State was only better than first-place New York at 12.8%, New Jersey (12.4%) and Connecticut (12.3%). And on a per-capita basis, California’s state-local tax burden was the sixth highest at $4,934.

Arizona and Nevada – bordering states that aggressively advertise and recruit companies from California – were among the lowest in the nation, at 8.4% and 8.2%, respectively. Arizona finished at No. 40, while Nevada ranked No. 42, or two of the states with the lowest rates.

And Californians agreed to boost the state’s sales tax rate by a half-cent and increase additional income taxes on the highest-income residents in the state. Prop. 30 is expected to raise about $6 billion per year, though the state would still remain lower than third-place Connecticut, according to the Tax Foundation.

California’s high tax burden is largely based on high sales, income, gas and corporate taxes, while property taxes are relatively low, thanks to Proposition 13.

Nevada has the nation’s lowest corporate and personal income tax rates, while Arizona finished at No. 24 and No. 17, respectively.

Alaska had the lowest overall state and local tax burden at 7.0%.

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